the Rent Act was that the possession of the
tenant-firm and persons claiming through such
tenant became unauthorized. Since the tenant was
a Firm, persons connected with the internal affairs
of the Firm such as its partners and the employees
working in the Firm were also bound by the eviction
decree for the simple reason that all such persons
were claiming through the tenant-Firm.
25) An employee of a tenant is never considered to
be in actual possession of tenanted premises much
less in possession in his legal right. Indeed, he is
allowed to use the tenanted premises only with the
permission of his employer by virtue of his contract
of employment with his employer. An employee,
therefore, cannot claim any legal right of his own to
occupy or to remain in possession of the tenanted
premises while in employment of his employer or
even thereafter qua landlord for want of any privity
of contract between him and the landlord in respect
of the tenanted premises.
26) There was, therefore, no need for the appellant
to file a separate suit to claim possession of the suit
house against defendant no.1 under the general law
as he was well within his legal right to execute the
decree for eviction from the demised premises in
this very litigation not only against the original
tenant but also against all the persons who were
claiming through such tenant. As mentioned above,
defendant no.1 was such person who was held to be
claiming through the tenant being its employee and
was, therefore, bound by the decree once passed
against his employer-tenant.
27) A tenancy is a creation of contract between the
two persons who are capable to enter into contract
called lessor/landlord and the lessee/tenant. The
two persons can be either living person or juristic
persons such as Partnership Firm or a Company.
28) Once the tenancy is created either orally or in
writing with respect to a land or building then it is
always subject to the relevant provisions of the
Transfer of Property Act, 1882 (hereinafter referred
to as “the TP Act”) and the State Rent Acts. Sections
105 to 111 of the TP Act provide certain safeguards,
create some statutory rights, obligations, duties
whereas the State Rent Acts, inter alia, specify the
grounds to enable the lessor to evict the
lessee/tenant from the demised premises.
29) If the lessee/tenant is a living person, then in
such event, the tenant would also include his legal
representatives in the event of his death together
with his dependents living with the tenant in the
tenanted premises. Likewise, if the lessee/tenant is
a juristic person, i.e., partnership Firm then such
tenant would represent the interest of all the
partners of the Firm and the employees working in
the Firm. Such persons since claim through the
Firm, they have no right of their own in the tenancy
and in the demised property qua landlord.
30) As a matter of fact, in our view, it was not
necessary for the appellants to have impleaded
defendant no.1 in the present rent proceedings. The
reason being that in rent proceedings the
lessee/tenant is the only necessary or/and proper
party and none else. A person, who claims through
lessee/tenant, is not a necessary party.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.11868 OF 2016
(ARISING OUT OF SLP (C) No. 19259 of 2010)
Nandkishor Savalaram Malu (Dead)
V
Hanumanmal G. Biyani (D)
Dated:November 29, 2016.
Citation:(2017) 2 SCC 622
2) This appeal is filed against the final judgment
and order dated 23.03.2010 passed by the High
Court of Judicature at Bombay in Civil Revision
Application No.493/2008 allowing the said revision
application filed by the respondents herein.
3) Facts of the case lie in a narrow compass so
are the issues involved in the appeal, a short one. It
would, however, be clear from the facts mentioned
infra.
4) The appellants are the plaintiffs (landlords)
whereas the respondents are the defendants
(tenant).
5) One Mr. Sawalaram Shriram Malu and Mr.
Nandkishore Sawalaram Malu (father and son
respectively) jointly owned House No.47/48 situated
in Madhavnagar at Sangli (MH) (hereinafter called
"the suit house"). They let out the suit house to a
firm called "M/s Biyani Textile" (hereinafter referred
to as "the Firm”) on a monthly rent of Rs.260/-.
6) On 09.03.1982, the landlords served a quit
notice on the tenant-Firm and determined the
tenancy by demanding arrears of rent for the period
01.06.1980 to 28.02.1982 and possession of the
suit house. Since the Firm did not pay the arrears
as demanded and nor vacated the suit house, the
landlords were constrained to file a civil suit being
Regular Civil Suit No. 317 of 1982 claiming decree
for arrears of rent and eviction under the provisions
of the Bombay Rent Control Act. The suit was filed
against one employee of the Firm-defendant no.1
and partners of the Firm-defendant nos.2 to 9 in the
Court of IInd Civil Judge, Jr. Division, Sangli.
7) Defendant no.1 filed his written statement
whereas defendant nos. 3, 4 to 9 filed their written
statement jointly. So far as defendant no.1 is
concerned, he set up his case contending that he
was working as employee of the Firm. He further
contended that in 1980, there was some discussion
between the plaintiffs and the partners of the Firm
about vacating of the suit house and pursuant
thereto, the Firm vacated the suit house. The suit
house was then let out to defendant no.1 by the
plaintiffs. It was then contended that plaintiff no.1
died and his legal representatives not having been
brought on record, the suit could not be continued
at the instance of plaintiff no. 2 for want of any
privity of contract between defendant no.1 and the
plaintiff no.2.
8) So far as the partners of the Firm, i.e.,
defendant nos. 3, 4 to 9, are concerned, they
contended that they having vacated the suit house
in May 1980 and cleared all their arrears of rent,
they are no more liable to do anything in the case
and, therefore, suit against them is liable to be
dismissed.
9) The Trial Court, vide judgment dated
14.10.1991, dismissed the suit against defendant
no.1 whereas it was decreed against defendant nos.
2 to 9. Firstly, it was held that the suit house was
let out to the Firm through their partners
(defendant nos.2 & 3) and, therefore, the Firm was
the tenant. Secondly, the Firm had committed
defaults in payment of arrears of rent and also
failed to re-pay when demanded by the plaintiff.
Thirdly, defendant no.1 was an employee of the
Firm. Fourthly, defendant no. 1 was not the tenant
of the plaintiff as claimed by him and was in
unauthorized occupation of the suit house as a
trespasser. Fifthly, the Firm and its partners
(defendant Nos.2 to 9) having failed to pay the
arrears of rent, are liable to be evicted from the suit
house under the Bombay Rent Control Act. Sixthly,
the suit did not abate on the death of plaintiff no.1
because plaintiff no.2 is already on record and
sufficiently represent the estate of the deceased,
plaintiff no.1. Seventhly, liberty was granted to the
plaintiff to file separate suit against defendant no.1
under the general law to claim possession of suit
house because he was found to be in possession of
the suit house as trespasser and no eviction decree
can be passed against a trespasser under the Rent
laws.
10) Felt aggrieved, Plaintiff no.2 filed first appeal
being R.S.A. No. 577 of 1991 before the District
Judge, Sangli. By order dated 03.02.2006, the
District Judge allowed the appeal and decreed the
suit against all the defendants as claimed by the
plaintiffs. It was held that defendant no.1 being an
employee of the Firm was bound by the decree
passed against the Firm and its partners (defendant
Nos.2 to 9). It was further held that the defendants
failed to prove that the Firm or/and its partners
surrendered the possession of the suit house to the
plaintiffs on 12.05.1980 and vacated the suit house.
It was further held that defendant no.1 failed to
prove that he became plaintiff's tenant in his
individual capacity by entering into a fresh contract
of tenancy on vacating the suit house by the original
tenant as claimed by them and lastly, the
defendants are liable to pay the mesne profits at the
rate of Rs.260/- per month from 01.05.1980 till
delivery of possession of the suit house to the
plaintiff.
11) Felt aggrieved, the defendants filed revision
application being C.R.A. No. 493 of 2008 before the
High Court. While the revision application was
pending, defendant no.1 died and hence his legal
representatives were brought on record. The High
Court, by impugned order, though did not disturb
the factual finding of the first appellate Court yet
allowed the revision and while setting aside the
order of the appellate Court, restored the order of
the Trial Court. It is against this order, plaintiff
no. 2 (landlord) felt aggrieved and filed this appeal
by way of special leave before this Court. During the
pendency of this appeal, he also died and hence his
legal representatives were brought on record to
continue the lis.
12) Heard Mr. R.S. Hegde, learned counsel for the
appellants and Mr. Sukhbir Singh, learned counsel
for the respondents.
13) Learned counsel for the appellants (plaintiff)
while assailing the legality and correctness of the
impugned order argued three points.
14) In the first place, he argued that the High
Court was not right in allowing the revision.
Learned Counsel urged that the High Court failed to
even take note of the settled legal principles
applicable to the controversy at hand and thus
committed jurisdictional error.
15) In the second place, learned counsel argued
that without disturbing any of the factual findings
of the first appellate Court, which were otherwise
binding on the High Court in its revisionary
jurisdiction, the High Court committed
jurisdictional error in holding that once it is held in
rent proceedings that defendant no.1 was a
trespasser then no decree under the Rent laws
could be passed against a trespasser for his
eviction from the suit house and the remedy of the
plaintiffs in such circumstances is to file regular
civil suit under the general law for obtaining
possession.
16) In the third place, learned counsel argued that
the High Court failed to see that a decree for
eviction was rightly passed against the Firm and its
partners holding them as tenant and this decree,
according to him, was binding on defendant no.1 on
all force for the simple reason that firstly, defendant
no.1 even according to his own case was an
employee of the Firm and the Courts also held him
to be so. Secondly, defendant no.1 failed to
establish his independent contract of tenancy with
the plaintiffs though claimed. Thirdly, the Firm
through their partners failed to prove that they
surrendered the vacant possession of the suit house
to the plaintiffs on 12.05.1980.
17) According to learned counsel, it was, therefore,
a clear case where tenant having suffered a decree
for eviction, all persons claiming through such
tenant or/and those acting for and on behalf of the
tenant-Firm, had to be dispossessed on the strength
of the decree suffered by the tenant-firm.
18) On these submissions, learned Counsel for the
appellants prayed for reversal of the impugned order
and restoration of the order of the first appellate
Court.
19) In reply, learned counsel for the respondents
supported the impugned order and contended for its
upholding.
20) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to accept the submissions of the
learned counsel for the appellants as, in our
opinion, it has a force.
21) Indeed, we are constrained to observe that
there was absolutely no legal basis for the High
Court to have reversed the well-reasoned order of
the first appellate Court which had rightly reversed
the order of the Trial Court by passing decree for
arrears of rent, eviction and mesne profits against
all the defendants jointly and severally. The High
Court, unfortunately, failed to apply the settled legal
principles applicable to the case at hand as are
enumerated herein below in the light of following
factual findings of fact recorded by the two Courts
below.
22) Firstly, the Firm was held to be the tenant
whereas defendant no.1 was held to be Firm's
employee. Secondly, the Firm failed to prove that
they surrendered their possession to the appellants
and cleared all arrears of rent and lastly, defendant
no.1 was held to be in possession of the suit house
as “trespasser” and not as “ appellants’ tenant”.
23) With these concurrent findings of fact, we are
of the considered opinion that neither the Firm nor
their partners and nor defendant no.1 had any legal
right to remain in possession of the suit house. The
reason being that so far as the Firm and its
partners were concerned (defendant Nos. 2 to 9),
they being the tenant rightly suffered the decree for
payment of arrears of rent and eviction under the
Rent Act and so far as defendant no.1 was
concerned, he was neither an owner of the suit
house nor a tenant inducted by the appellants and
nor a licensee but was held to be an employee of the
Firm and a rank trespasser in the suit house.
24) The legal effect of such eviction decree under
the Rent Act was that the possession of the
tenant-firm and persons claiming through such
tenant became unauthorized. Since the tenant was
a Firm, persons connected with the internal affairs
of the Firm such as its partners and the employees
working in the Firm were also bound by the eviction
decree for the simple reason that all such persons
were claiming through the tenant-Firm.
25) An employee of a tenant is never considered to
be in actual possession of tenanted premises much
less in possession in his legal right. Indeed, he is
allowed to use the tenanted premises only with the
permission of his employer by virtue of his contract
of employment with his employer. An employee,
therefore, cannot claim any legal right of his own to
occupy or to remain in possession of the tenanted
premises while in employment of his employer or
even thereafter qua landlord for want of any privity
of contract between him and the landlord in respect
of the tenanted premises.
26) There was, therefore, no need for the appellant
to file a separate suit to claim possession of the suit
house against defendant no.1 under the general law
as he was well within his legal right to execute the
decree for eviction from the demised premises in
this very litigation not only against the original
tenant but also against all the persons who were
claiming through such tenant. As mentioned above,
defendant no.1 was such person who was held to be
claiming through the tenant being its employee and
was, therefore, bound by the decree once passed
against his employer-tenant.
27) A tenancy is a creation of contract between the
two persons who are capable to enter into contract
called lessor/landlord and the lessee/tenant. The
two persons can be either living person or juristic
persons such as Partnership Firm or a Company.
28) Once the tenancy is created either orally or in
writing with respect to a land or building then it is
always subject to the relevant provisions of the
Transfer of Property Act, 1882 (hereinafter referred
to as “the TP Act”) and the State Rent Acts. Sections
105 to 111 of the TP Act provide certain safeguards,
create some statutory rights, obligations, duties
whereas the State Rent Acts, inter alia, specify the
grounds to enable the lessor to evict the
lessee/tenant from the demised premises.
29) If the lessee/tenant is a living person, then in
such event, the tenant would also include his legal
representatives in the event of his death together
with his dependents living with the tenant in the
tenanted premises. Likewise, if the lessee/tenant is
a juristic person, i.e., partnership Firm then such
tenant would represent the interest of all the
partners of the Firm and the employees working in
the Firm. Such persons since claim through the
Firm, they have no right of their own in the tenancy
and in the demised property qua landlord.
30) As a matter of fact, in our view, it was not
necessary for the appellants to have impleaded
defendant no.1 in the present rent proceedings. The
reason being that in rent proceedings the
lessee/tenant is the only necessary or/and proper
party and none else. A person, who claims through
lessee/tenant, is not a necessary party.
31) The aforementioned factors were completely
overlooked by the High Court. It is for these
reasons, the impugned order is not legally
sustainable and, therefore, deserves to be set aside.
32) In the light of foregoing discussion, the appeal
succeeds and is accordingly allowed with cost
quantified at Rs.5000/- payable by the respondents
to the appellants. The impugned order is
accordingly set aside and, in consequence thereof,
the judgment/decree passed by the first appellate
Court (District Judge, Sangli) dated 03.02.2006 in
Civil Appeal No.577 of 1991 is hereby restored.
33) The respondents are granted three months’
time to comply with the judgment and decree of the
first appellate Court by depositing the entire money
part of the decree as awarded therein and further to
handover the vacant possession of the suit house to
the appellant. The respondents would also pay to
the appellants three months’ rent by way of
damages in advance and the cost awarded by this
Court within one month and to submit the usual
undertaking to this Court, failing which the decree
dated 03.02.2006 be executed against the
respondents forthwith on the expiry of one month.
………...................................J.
[A.K. SIKRI]
…...……..................................J.
[ABHAY MANOHAR SAPRE]
New Delhi;
November 29, 2016
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